How many Business Development or Salespeople Do You Really
Need?
Before you hire anyone ask yourself this question, how big
is your market opportunity?
Here’s a ten (10) step approach The Learning Strategy, www.thelearningstrategy.com found
that works:
1.
Begin with your average contract amount multiplied
by your average profit margin. Let’s say
$40,000.00 (gross) divided by 35% = $26,000.00 (net).
2.
Let’s say your combination of new and existing accounts
equal 300 per year with an average gross revenue (AGR) of $120,000,000.00,
average net revenue (ANR) is $7,800,000.00 per year.
3.
Current ratio sales per account is 1
salesperson|100 accounts totaling 3 salespeople accountable for $4,000,000.00 AGR,
$2,600,000.00 ANR each.
4.
Now you need to identify the size of your market,
what type of training customers are buying and what type of training customers
will be buying.
5.
Let’s say you can identify 2000 businesses with
an employee size of 100 or more. Now you
need to eliminate businesses that don’t qualify as part of your served
market. For instance, if you providing
high-ticket sales training, you may want to eliminate industry codes having to
do with retailing who sell through distributors or non-profits. Then you might want to eliminate all
non-headquarters businesses (if headquarters are where the decision-makers
are). You may be down to 1000
businesses.
6.
Then you may want to validate and score. Are these ideal customers? Rate them by
Dollar Potential, Access & Credibility, Product Training Fit, Community
College Value-Added Fit, Leverage and your Personal Conviction. Uh oh, down to 300 targeted business
prospects!
7. Next, add your existing accounts plus
the targeted prospects (300) by the number of calls or outreach attempts. You’ll want to segment the opportunity here, “awarding”
more sales calls and outreach attempts to businesses with larger
potential. You may also want to budget
more touches with businesses you already do business with (you don’t want to
lose them!).
8.
Go back to item 3 for a second… Using the 1 salesperson|100 account ratio, let’s
say it took seven touches or 700 calls a year or an average of 20 calls or
outreach attempts per week. Use this as
your model example.
9.
Now you simply multiply the total number of
existing accounts and new targeted business prospects by the amount of
touches per year to determine how many touches a typical salesperson can
make. Be sure and reflect the time your salespeople spend
in non face to face activities like research, planning and reporting, custom development
projects, quality assurance and training which is about 30% of the week.
10.
Based on the above scenario, to maintain your existng accounts and
target new business prospects totaling 600 accounts, would require 4,200 touches. 4,200 touches divided by an average of 700
touches per salesperson works out to 6 full-time salespeople. So if you have 3 people now, you could:
a.
Add more full-time headcount (in this case an
additional 3 salespersons) or,
b.
Increase the size of the opportunity for the
targeted business prospects or,
c.
Hire the Appointment Lab via www.thelearningstrategy.com to
reduce the amount internal calls/touches, reduce the amount of research,
planning, reporting % and ultimately maintain the amount of full-time headcount
capacity refocusing their efforts on nurturing the business relationship.
How do you determine you’re Business Development (BD) or Sales budgeting
if you are providing corporate/contract training to businesses? And how can you
grow your gross and net revenue if adding more salespeople is not warranted? And what sort of approach should you use if
your BD or sales team includes the Appointment Lab? How critical is it for you to ensure that the
partner you choose understands what your values are and how you are represented
in the business community you serve? We’re
helping Community Colleges competitively position themselves in the markets they serve!
